Fin24

Govt doesn't want to block Walmart deal

2011-07-25 08:22

Johannesburg - Government is not seeking to overturn competition regulators' approval of Walmart buying control of local retailer Massmart Holdings [JSE:MSM],  but wants tougher conditions for the deal, the Business Day newspaper reported on Monday.

Wal-Mart finalised its $2.4bn purchase of 51% of discount retailer Massmart on June 20, after winning approval with minimal conditions from South Africa's Competition Tribunal.

It was reported last week that the government was appealing against the tribunal's decision and wanted the court to either set aside the ruling or send the matter back for further consideration.

But Business Day quoted department of trade and industry director general Lionel October as saying the government wants the antitrust authority to increase potential penalties for the companies if jobs are lost or local products are swamped by a surge in imports.

"The thrust is not blocking the merger any more. We're more looking at the condition they gave," October was quoted as saying.

One option being considered was to change the conditions of the R100m fund to help local suppliers which was part of the deal.

October said if it could be shown that jobs were lost because Walmart was not buying from the local supply chain, then the US retailer would have a duty to improve on the programme. 

Comments
  • Frungy - 2011-07-25 08:42

    This is the main problem with the ANC government, they don't know when to leave business alone. They cry about wanting more foreign investment, then when the country gets a major deal like this they cry about wanting to restrict the foreign investors. Government needs to stop interfering in business (and the same goes for business, no interfering in government guys, so no tender buying, etc).

  • Seanred - 2011-07-25 08:43

    Does SA produce anything NOT mined? A few veggies, and the rest is Chinese. So sad to see hardly anything "Proudly SA"

  • Freelance Writer - 2011-07-25 08:50

    Seems that big business got to the government to try and force conditions on Walmart. Wonder how much pick n pay is paying them off.

  • Bill - 2011-07-25 09:04

    “local products are swamped by a surge in imports” And this is the same government, that allowed Chinese imports in the clothing and footwear industry, to swamp SA. Causing the closure and downsizing of all local major brands at the cost of tens of thousands of jobs!! Does not make sense to me! There is more to this than meets the eye! Like a couple of greedy fingers that want their attached palms greased…!

      davek - 2011-07-25 18:52

      Perhaps this is the point. The tortoise stuck out its head once and is extremely timid about sticking it out again.

  • samzaG - 2011-07-25 09:10

    Cosatu should make sure this deal will benefit us all, there is no point for them to rush this scrapulous deal two months down the line the very same Vavi and Sdumo is on the street. As a small farmer and in the progress of expanding I want to be assured that my product is supplied to this company.

  • The Monk - 2011-07-25 09:15

    Aha, so now the goverment is actively seeking private companies to fund the gravy train.

  • No8 - 2011-07-25 09:21

    More palms to be greased?????

  • Rocky_III - 2011-07-25 09:26

    I reckon the ammendments is At least half of the fund to be spent paying off the corrupt fatcats.

  • Phillip de Waal - 2011-07-25 09:33

    Yeah, and this is not going to scare off any potential investors at all...

  • Vroom - 2011-07-25 09:39

    Walmart should can the whole deal if Government gets their fingers in the pie. Investing in SA is very risky and the proposed labour force will only go on strike to suit their own needs.

  • 50something - 2011-07-25 10:41

    Throughout this whole saga, I was wondering why all of a sudden all of these conditions are emposed on the Walmart deal and not to the existing business? What is the government trying to tell investors? Leave us alone, we don't want your investment because the unions rule the country and if it only our own people, it is much easier to commit corruption, fraud, etc.?? We don't want international companies to expose our lavish lifesyle.

  • MoneyMike007 - 2011-07-25 11:04

    really now? This is moronic to say the least, let walmart in, I wonder when they'll focus on the issues mentioned by - A View

  • PunkBuster - 2011-07-25 12:21

    I know they say the reason for re-considering the conditions are job loss and the influx of foreign products however I think this is just a cover for an underlying agenda. Another industry for them to nationalize and regulate in the future perhaps??? Definately not getting the whole story here. Conspiracy theory or not???

  • DirtySamurai - 2011-07-25 13:06

    The ANC's Kickbax Mahlangu had the following to add: "Come on guys we're just saying a few more conditions, like maybe a hundred million of them in unmarked bills in the pikitup bin outside Luthuli house"

  • Old Realist - 2011-07-25 13:47

    The question no one is asking is if the idiots from Government (who appear to be rogues and acting against what Shower head is publicly saying - not that he controls anything anymore it seems), get their way, will Walmart be able to revoke its offer and walk away? My feeling is that it will be in a position to launch a huge damages claim as it proceeded in good faith after getting the green light from the only official (ANC created, funded and staffed) organisation whose blessing it required. Maybe what the real problem is that no one deposited the required funds into the Ratanya Trust?

  • Jim - 2011-07-25 14:05

    I wonder which minister lined his pockets here with all the goings on? One minute yes next minute no. Makes one wonder doesnt it?

  • kenneth.roselt - 2011-07-25 15:50

    Walmart should cancel the deal, ope shops themselves and then they won't need to have all these issues thrown, every week an new saga as someone looks to benefit. Then let Walmart impose it's terms and conditions.

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